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An update on November 2016 demonetization in India added at end of this note
Having lived and worked in both the west and India, one thing has never ceased to amaze this author more than the utter chaos that prevails in the design of Indian notes and coinage ever since a decade or so after independence from British Rule.
It was not so when India
was part of the British Empire. Then the
design of Indian rupee coin remained essentially unchanged for decades. What
changed was the image of the ruling Monarch on the coin. Ever since then, the
design of the Indian one rupee coin has changed with great rapidity so many
times that it is difficult to keep count. So has the design of other coins so
that if one was past forty one would have to pull out one’s specs to make out
which is which. It is hard to distinguish between a one and two rupee coin
without reading what is on it. Compare this to the US where even a blind person or
child can tell the difference between a penny, nickel, dime and quarter just by
holding it. The design of coins in US and Canada are in distinct sizes and have
remained unchanged for decades as was the case with the Indian Rupee in the
British Era.
Chaos prevails not just in the design of coins but also in
the choice of their denominations. One wonders why there is a two rupee coin in
the first place or why also not a three and four rupee coin too. The choice of
denomination is a matter of careful and specialized study and research.
Fortunately most countries need not do it. They can just copy others who have.
If US can function with a 1 cent, 5 cent and 10 cent coin only and go on to
become the largest, most dynamic economy in the world, one wonders why India
needs 1, 2, 5 and 10 rupee coin. USA also has a 25 cent coin called
a quarter. India
does not need a 25 rupee coin yet but instead needs an additional 50 paisa coin
at the moment.
The first impression of this author was that this confusion
and chaos in coin design is merely a matter of carelessness or enthusiasm of
designers gone out of control with an element of a financial commission thrown
in, every time a new die has to be cast. When Raghuram Rajan became the RBI
governor this author was inspired enough to write to him about it in 2013. He
has been a former student from IIT when this author was a Professor there.
Moreover the Governor has lived in the west and can appreciate the matter.
Therefore, this author immediately prepared a note on the issue that included
suggestions on how the situation may be corrected. The communication was sent
to him at more than one email address as well as a public open letter that is
still on facebook. A copy will be added as an addendum to this note for easy
reference. However, there was absolutely no response or action on his part and
the situation has remained unchanged or become worse since then
Recently the thought occurred to this author that there may
be a deep International conspiracy behind the chaos in coin designs rather than
just neglect. This author is not a conspiracy theorist but when there are signs
of one afoot he feels it is better to voice the concern for others to examine.
One might wonder what the conspiracy could be. In a different blog that deals
with philosophical and other issues this author has described that at the root
of development of nations is the level of chaos or order that prevails in a
nation. The earlier note describing relationship of chaos to development can be
found here:
While order leads to development, disorder and chaos leads
to the reverse. It has been in the interest of the developed world and money
powers that dominate the world that undeveloped parts of the world remain so. If
other nations too develop, it dilutes their influence in the world as also the
potential to export their goods.
If one wishes to keep a part of the world undeveloped,
promoting chaos and confusion is the best available tool. What better way to
instill it in the psyche of citizens than through something very basic all have
to deal with at all times i.e. the design of money – notes and coins
The story of currency notes is similar; their colors keep
changing and are often indistinguishable so that many a citizen has lost his
five hundred rupee note for a purchase worth one hundred rupees on a dusky
evening or a hurried moment. One wonders why colors keep changing. The US and
Canadian dollars have remained green for as long as one can remember. What is
even more confounding is why the colors are not distinct when the Lord has colored
our world in so many different colors. Even prehistoric man knew how to use
distinct colors in man-made products they dealt with such as their pottery and
therefore lack of technology is not the cause here.
The dynamic new Prime Minister of India, Shri Narendra Modi
has special expertise in the matter of colors and it is hoped that when a copy
of this note reaches him and the new RBI Governor, a change will be made on the
issue in the near future.Currency can be very colorful as the following image shows. it is tragic that while Australia has launched a currency that blind persons can distingusih, India has one that even those with eyes cannot.
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| http://www.independent.co.uk/news/world/australasia/australia-new-banknote-5-dollars-blind-people-braille-raised-bumps-a7219396.html |
Regarding Professor Swami who was this author’s Professor
having taught him economics at IIT Delhi during 1970-71, may it be said that
his deduction that Governor Rajan may work for International Interests is not
at all far fetched. Firstly, it is impossible to attain a senior position in
the IMF unless one furthers such interests; secondly, it is unlikely that one
can remain a Professor of economics for long in a leading International
University in the US without it (with some notable exception such as Noam Chomsky).
This author has been a Professor in a leading Western University
too and is fully aware of the mechanisms that come in to play.
Addendum: An old note on the topic by author at
An Open letter to Shri Raghuram Rajan, Governor of the Reserve Bank of IndiaDear Shri Raghuram Rajan.
For a long time now, as a concerned and educated citizen some questions have troubled me and several other citizens of India about the design of Indian currency notes and coins.
One feels emboldened to raise these queries with you now because of your IIT and International academic background. My own background is precisely similar. I too am an IITian and I too have been on the faculty of a North American University. I was an Assistant Professor at IIT Delhi in the year you graduated from there and have taught you thermodynamics (I mention this as a side because if you recall some of that thermodynamics, frequent change and chaos are the most entropy increasing processes leading to highest inefficiencies).I have two simple questions in this connection:
- Why is the design of Indian coins and notes changed so frequently (in USA they have hardly changed for a century, more or less and neither did they in British India so frequently)?
- Why are the colors of our currency notes not distinct to avoid the possibility of confusion?
I realize that there may be possibility of reduced perks and commissions for designers of coins, dies and those authorizing it in case designs do not keep changing at great speed if corruption exists in this area but if that is the case it is hoped you will not support a perpetuation of this practice. It also paints India as a country with unstable policies in the eyes of the world. Recently Prime Minister Narendra Modi promised to rectify this in Germany. From a practical point of view it makes it impossible to design coin operated machines in India. Moreover older persons cannot tell which is which without their reading glasses and that is a real nuisance and neither can young children or the illiterate who have not yet learned to read.In these questions, criticism of existing practice is implied therefore may I suggest a simple solution to the problem so that this note is constructive:1. If we are incapable of creating stable and distinct designs as indeed has been the case for more than half a century one can easily copy the design of another country for example US coinage and notes. With coins, a one rupee coin like a penny (in a cheaper metal rather than copper), five rupee like a nickel, and ten rupees like a dime. A 25 rupee quarter could be introduced in future if necessary. The fifty paisa coin in existing design may continue for as long as it is required. Or even better we can make the size incrementally increasing according to value of coin in these designs to even improve upon the US practice by swapping the nickel and the dime that are in incorrect order for historical reasons in US where they value stability and do not change on whim even if an error has been made.2. As regards notes, one may copy the color and design of US notes i.e. a 100 rupee note like the US one dollar bill and five hundred rupee note in five dollar bill color and so on. Similarly the 1000 rupee note may be in the color of the ten dollar bill. Whenever 2000 rupee, 5000 rupee notes are introduced the remaining colors could similarly be copied.There need not be an issue of ego or pride in adopting successful designs from elsewhere in the world. Rather it is a mark of wisdom to do so. It goes without saying that the picture and print designs on coins and notes will be our very own national ones. Aside from sending this to reserve bank, your Chicago academic address I am also posting it as a public note in case other valuable suggestions are given by others in comments. With regards and best wishes and also a belated congratulations for your successful career from a prof to an ex-studentAshokDr. Ashok Malhotra, B.Tech, IIT Delhi, Ph.D., UBC CanadaUPDATE APRIL 27, 2015Even Coin Mix needs urgent rationalizationIndian coinage in the one to ten rupee range uses coins of 1, 2, 5 and 10 rupees on the other hand in a similar range in Canada and USA the coins are 1, 5 and 10 cents. Therefore one of these choices is faulty. Both cannot be optimal. One only has to glance at how the economy has been moving in the former countries over the last seventy years as compared to India to deduce which is a better choice. The conclusion is that there is no need for a 2 Rupee coin. Keeping both in circulation only increases cost, confusion, calculation, and banking and transaction times with no benefit at all. The minting of 2 rupee coins must be abolished immediately in the view of this author. A 2 rupee thing is easily purchased with two 1 rupee coins instead. In the years ahead though there may be a need to introduce a 25 rupee coin (a quarter) by learning from the experience of countries that have already been there
UPDATE November 19, 2016 : Demonetization in India
Around ten days ago the government of India
demonetized two of highest denomination notes in order to control illicit cash
flows and use. While the objective is laudable the replacement with new
currency notes is causing huge problems at the time of writing this update. One
of the reasons for this problem is one mentioned in the earlier note above, a
careless design of notes and coins in India. The new replacement notes
were of a different size to the original ones and thus existing cash dispensing
machines require re-engineering. In USA they standardized the size of
their currency note one hundred years ago.
Random and quick variations in sizes, denominations and
designs of both notes and coins create huge logistical problems in the modern
machine driven world. While the psychology of designers still remains
primitive, solutions are desperately needed. As already mentioned earlier in
the note, there is no shame in copying from other countries that have already
done a good of it. Why reinvent the wheel? It is once again reiterated that a
high powered committee be formed by the government to look into the issue even
with consultants from Japan and USA and this problem be solved once and for all
for the next hundred years if India has to stand proudly as a leading nation in the world. Action is required.
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